Why do companies need insurance?
The majority of businesses will require some sort of business insurance policy. The cover you take out depends completely on the nature of the business and the everyday activities involved in the industry.
The purpose of insurance is to cover your company in situations you cannot afford, for example if an employee claims compensation, or your company accidentally causes severe damage to a customer's property. Ensuring you have the suitable cover means the insurer will pay out up to the amount specified in the agreement.
Insurance is particularly important for small companies who could risk going bankrupt if someone were to make a large claim against the company. Always make sure you have the appropriate cover for all your business' activities.
How much does insurance cost?
The cost of insurance largely depends on the nature of your business and the type of cover you require. Obviously, the higher the level of cover, the more you will have to pay for your policy. The insurer will anticipate the likely situations your business could encounter and the risks involved to decide how much they require you to pay each year.
Compulsory Business Insurance
The following types of insurance are mandatory for many businesses; click the links to find out if any apply to your company.
Other Business Insurance
Consequences of not being insured
If you decide not to take out an insurance policy and someone claims against your company you may have to pay out extremely high sums of money to settle the claim. By taking out a policy you are handing over the risk of paying out money you cannot afford to much smaller monthly or yearly payments that you can afford.
If a certain type of insurance cover is compulsory for your business, for example employers' liability insurance (if you have one or more employees), you may be fined a large sum of money for every day the appropriate cover is not in place or even be shut down by the Health and Safety Executive.